Publication in Russian on the Zen blog
https://dzen.ru/a/ZvUwE60tU2fu_yJk

Give in to the logic of my arguments.

This paper examines the challenges facing the Russian economy in the face of declining incomes and rising prices. The inflation rate is above 19%, which highlights a worrying trend whereby rising prices are accompanied by falling incomes. This phenomenon occurs in a high interest rate environment, suggesting supply-side constraints rather than increased consumer demand as the main driver of inflation.

In addition, there is the impact of international sanctions on Russia, which are exacerbating the country’s economic woes. Despite efforts by neighboring countries such as Kazakhstan to circumvent these sanctions, the strain on the Russian economy is evident. As the winter season approaches, potential inflationary pressures are spreading to essential goods including food, raising concerns about food security and affordability.

This paper aims to provide a comprehensive view of the current economic situation in Russia, highlighting the relationship between sanctions, supply shortages, and their wider implications.

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In this publication I want to talk about the Russian economy. Is the Russian economy invincible or is it completely vulnerable. Russia is challenging Western values: stability and economic stability throughout the world. Allowing it to succeed in the current geopolitical situation means encouraging despotism throughout the world. Patriots claim that Russia is invincible. In my publications I show and prove that Russia is not invincible, that despite the fact that Russia is big and seems strong, in fact Russia is very weak. And if you delve into any data, you will see right now that the Central Bank of Russia has raised interest rates to 19%. How do you like 19%? 19% is a good rate in the banking window for super banks. But the reality is that if you take out a mortgage, you are talking about 20%, and if you are talking about credit card rates, you are talking about 30% per annum. So it is impossible to have normal capital accumulation in Russia when business rates are 20% and consumer spending can face a 30% headwind. In fact, disposable income has fallen by 30%. The average person's income has fallen, and that already speaks to the invincibility of the economy. The official data are aggregated data and are not accurate, these figures are also heavily distorted by Moscow, but the point is that there is a trend towards lower disposable income and lower overall personal spending. Total income per month is falling, interest rates are rising, and sanctions are getting tougher. And they are trying to get around these sanctions. Kazakhstan is a big place, these are port cities where you can get around sanctions. Western European countries and other countries around the world are importing goods to Kazakhstan, and if you look at the charts and the data, you can see that imports are growing. And then Kazakhstan is exporting to other countries. The West is tightening sanctions, but Kazakhstan is a bypass. A very bypass. Think about it. Have you ever been to a major port city? These are major hubs, they are just an endless sea of ​​trains and ships and infrastructure built around imports and redistribution. And if Kazakhstan is sending goods to somewhere like Kazan, which is quite a distance from the port cities of Kazakhstan, they can bring it by train, but it cannot compare to the logistics hubs of, say, Rotterdam, or some other place that is really professionally set up for imports. So the goods that are being shipped, these are priority imports, things like dual-use components, electrical components, which can play a major role in the current geopolitical event. Russia may claim that these are consumer goods shipped by roundabout routes to Kazakhstan and then imported into the Russian industrial complex, but nevertheless, sanctions are simply putting pressure on Russia, and the proof of this is that incomes are falling, inflation is rising. And if in Russia they claim that inflation is 8%, then this is not true, because real inflation corresponds to the minimum interest rate - this is 19%. In Russia they claim that there is high consumer demand, but this is not true, because personal income does not increase with the current rapid inflation caused by the deficit. What do you think will happen with food shortages and deficits everywhere in Russia? Russian propagandists show markets overflowing with food. And they show this during the harvest season. But look at what will happen in January. There will be a food shortage, which is a distribution problem, when cash flows and everything else are concentrated and directed at a geopolitical event. Add to this the sanctions, which will not go away, and there will be a deficit, and the proof of this deficit is already now growing inflation, when actual income and monthly income are declining. Based on the data, you can check all this yourself. If you are a logical, intelligent, objective person, think and explain how personal income is declining? How can Russia bypass shortages and rapid inflation? Imports to Russia are limited. But there are countries like Turkey with figs, olives from Morocco, potatoes from Egypt, there are even food products from India and China. And all of this is delivered to Kazakhstan. And this is a certain logistical problem, because the ports of Kazakhstan are not real logistics centers with a distribution network of trains and high-tech trucks and planes, with communication algorithms spread throughout the territory. To deliver potatoes from Egypt, you need to cross the Middle East, unload in Kazakhstan, and then wait for these potatoes to appear on the market in the near future. And let these Russian propagandists show what will happen in January on the markets, will there be a shortage in Russia? Russia is not invincible, and if it continues to participate in current geopolitical events, it will destabilize the world with despotism and economic problems. Economic data shows that Russia is not invincible. And if propaganda shows how wonderful everything looks during harvest time, then do not forget about the approaching winter in Russia and the sanctions in force. This winter Russia will have problems with supplies and distribution. And do not forget that the Central Bank is raising interest rates to 19%, unlike the rates in the US, which are falling and are now 5.25%, falling to 4%, because inflation is falling. Russia is not the West, the West has a high standard of living and the highest household income, compared to Russia. This is the state of the Russian economy now. Let's track what will happen in a few months. In the meantime, I will write the next publication, why today's Russia is zero. Have a nice day and thank you very much for your attention.

Лучшие книги в жанре Экономика

Учебники по экономике - книги и аудиокниги

For Tea

It should be emphasized that the concept of "average income" or something like that is completely skewed in Russia. Russia is a country where the median and average are very different from each other; in most countries, the median and average are quite close (healthy). So the income from selling "average" Russians is much lower than the national average... because... there is no middle class in Russia. There is just an upper class, and all the trash is at the bottom. For those reading: if the average of some numbers is "5"... those numbers can either be 4,5,6, or 0,0,15. In Russia, it's like 0,0,15. On average, statistically, there is no one. You are either just a damn poor person, or just a very rich Kremlinite.

The government spends all available funds on things that harm Russia. Money leaves the economy, and there is little to be gained from it. Capital is redirected to non-productive sectors.

When personal incomes fall, prices rise only because of shortages. The deficit, in turn, is partly due to Russia's transition to a wartime economy, with most of its industrial production being repurposed to produce weapons, ammunition, and all other materials to support the war effort. For example, Russia's production of cars and the like is probably well below where it should be in sufficient volume.

Russia's decline will continue indefinitely. Unless Russia "finds a religion" and reformats itself into a sea of ​​democracies.

I estimate Russia's collapse since this summer at 10%, and it's increasing by 10% every quarter, meaning Russia's economic collapse is projected for 2025-2026.

Fun fact: most of Africa's famine is caused by wars and destabilization. Mostly by Russia.

What should be added is that old people and pensioners in Russia barely have enough to live on, and what little they have is "eaten up" by inflation from above. But as we all know, the criminals in this government don't care about their people, and the people don't seem to care much about what's going on. Ironically, many of today's pensioners were from the Soviet era and support the Tsar because they are too deeply ideological. However, different times are coming with different people, because the world has the Internet and people are becoming more informed, people no longer want to live the way they live in Russia.

The RCB interest rate of 19% excludes consumer lending. With inflation: consumer bankruptcy, followed by sovereign bankruptcy, is inevitable.

Russia is learning that it is not a great power; the longer this lesson lasts, the more devastating this realization will be.

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Publication in Russian on the Zen blog
https://dzen.ru/a/ZvUwE60tU2fu_yJk